Co-op Energy has become the first big energy supplier to scrap standard variable tariffs (SVTs) for customers on a fixed deal. While other suppliers, including some of the Big Six, have announced they intend to scrap these tariffs, Co-op Energy is the first to take action on the issue.
With this move, Co-op Energy is no longer switching customers to its Green Pioneer SVT once their fixed-price tariff ends. They will instead be shifted to a new fixed tariff, which will run until May 2019, with no exit fees. The new tariff is around £100 a year cheaper than Co-op Energy’s SVT.
The adjustment applies to customers whose fixed deals have ended since 31 December 2017. While fixed tariffs have a set price for a certain period such as one or two years, SVT costs are variable, so the rate paid by customers varies as well – making these more expensive.
The change follows the government’s pledge to cap SVTs. A 2017 report into the energy market by the Competition and Markets Authority estimated the detriment from excessive prices to the domestic customers of the Big Six energy firms to be about £1.4bn a year between 2012 and 2015.
Owned by the Midcounties Co-operative, Co-op Energy achieved sales of £295m in 2016/2017. In November 2016 it was chosen to take on 156,000 customers from bankrupt GB Energy. A year later the supplier won the Customer Care Award at the 2017 Utility Week Awards for how it handled the takeover.
A spokesman for Co-op Energy said: “From December 31 last year, all customers who do not switch to an alternative tariff when their fixed tariff ends are automatically moved onto our new Co-op Fixed Green Energy May 19 v2 fixed-price default tariff, rather than our standard variable rate.
“This ensures that customers who have chosen a fixed tariff in the past get the peace of mind that the price they pay on their new tariff will currently be fixed until May 2019.
“The Co-op Fixed Green Energy May 19 v2 is on average £100 cheaper a year than the Green Pioneer standard variable tariff and also guarantees customers 100% green electricity.”